Ghost kitchens save restaurant industry during pandemic, but future is unknown
In concept and use, ghost kitchens existed before the pandemic.
But in the year since the World Health Organization (WHO) on March 11, 2020, declared the novel coronavirus (COVID-19) outbreak to be a global pandemic, ghost kitchens have turned out to be the restaurant industry’s answer to questions springing from containment measures.
Unlike the arrival of food trucks, which often were met by hostile restaurant inspectors and local politicians wanting to protect brick and mortar restaurants, ghost kitchens weren’t getting much notice from the general public until recently.
History, however, may find that it was ghost kitchens that put the restaurant industry in a position to recover. The National Restaurant Association (NRA) reported 100,0000 restaurants closed permanently, eliminating 3 million jobs and losing $240 billion in sales.
COVID-19 mandates left many restaurant owners chasing costly improvements like building outdoor seating or installing more powerful HVAC systems that were changing and unpredictable.
Others figured out that keeping a dining room open at only a fraction of its capacity was nothing more than a way to lose money. They opted to cater exclusively to delivery and takeout customers. That business model does not require all the trappings of a full-size restaurant location.
Only a kitchen is required, and by late 2020, ghost kitchens were the hottest craze in the restaurant industry. Ghost kitchens are often in “undesirable, yet convenient locations,” including abandoned restaurants, empty mall spaces, and even shipping containers.
John Kelly, CEO of Zenreach, predicts ghost kitchens are going to be the “new normal.”
“Not all the trends that we have seen emerge during the pandemic are going to disappear, Kelly told Food Safely News. “Food delivery is one area that will probably level out to a new normal that is higher post-pandemic than pre-pandemic, and that bodes well for ghost kitchens.
“Good quality food ready for delivery without the costs of the traditional restaurant will have a certain appeal to both restaurateur and consumer alike.”
Kelly says big brands “have certain advantages over independent restaurateurs in name recognition and trust.” Diners, he says, are more likely to choose from names they recognize and trust.
Indeed, one market survey recently predicted delivery-only restaurants or ghost kitchens would be a $1 trillion business by 2030,
Not everyone is on board with that. “Ghost Kitchens Will Always be Dumb,” wrote food writer Rachel Sugar last month in New York’s Grub Street. “They are not, in fact, the future of restaurants.”
She says the notion that ghost kitchens were the “next great restaurant innovation” took hold before the pandemic, and it came to pass only because “potential customers grew accustomed to going days without leaving home.”
The critic that finds delivery or takeout food equal to that served inside a restaurant’s dining room has yet to be found. It remains to be seen whether that reality will stunt the growth of ghost kitchens as more dining room capacity becomes available.
Ghost kitchens work for some entities such as Doordash, which began by offering to deliver menu items from local restaurants in Palo Alto, CA, in 2013. Today, it connects more than 390,000 merchants, more than 18 million consumers, and more than 1 million (delivery) “Dashers” in the United States, Canada and Australia through its local logistics platform.
SBE Entertainment Group has hooked up with U.S. mall owner Simon Property and hotelier Accor in C3 or Creating Culinary Communities to deliver virtual restaurant brands, upping the competition with the likes of DoorDash and Grubhub. Ghost kitchens are popping up in malls that have space because it’s no longer in demand by retailers.
C3 opened 138 Ghost Kitchens by 2021, up from 85 locations it planned when it launched in early 2020. It has also recruited 1,000 restaurant employees.
During the pandemic, ghost kitchens have kept delivery costs down for the consumer, according to some observers. San Francisco’s Sunset Square charges $5 for delivery in its neighborhood, $10 anywhere else in the city, and $20 for the suburbs.
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